US$23.5 Million Grant to Advance Sustainability in Palestinian Energy Sector

WASHINGTON  – The World Bank approved a US$15 million grant for the multiphase Advancing Sustainability in Performance, Infrastructure, and Reliability of Energy Sector (ASPIRE) – Phase 2. The program aims to improve the operational and financial performance of the electricity sector institutions and the diversification of energy sources in the West Bank and Gaza. An additional US$8.5 million grant will be contributed by donor partners*, members of the Partnership for Infrastructure Development Multi-Donor Trust Fund (PID MDTF), administered by the World Bank.

“A reliable and efficient electricity system is important to ensure uninterrupted provision of basic services to growing demands in a fragile context. Energy expansion and diversification will improve the quality standards for Palestinian households, health facilities, and schools, as well as help create economic opportunities. We are now moving to the second phase of the eight-year program with the continued support from our development partners to create stable, long-term investments in the sector,” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza.

The second phase will build on the core activities of the program’s first phase and focus on improving electricity infrastructure by upgrading existing lines and building new ones to absorb more solar energy. The renewed focus on infrastructure is crucial for increasing supply to areas facing shortages.

A key activity is the supply of smart meters to electricity distribution companies. Smart meters will help improve the metering and billing of large industrial and commercial consumers, thereby enhancing the financial performance of the sector.

The COVID-19 pandemic has further highlighted the critical need for stable energy services in health facilities, as electricity is needed to store vaccines and provide life-saving services. Phase two will expand solar energy supply to five additional major public hospitals. It will also examine the deployment of solar energy through a community-level pilot to help power up refugee camps. These activities will also help lower the cost of electricity and the financial burden on the Palestinian Authority.

“The multiphase program allows each phase to adapt to unforeseen emerging challenges, as in the case of the May 2021 Gaza conflict. Phase two will address immediate Gaza reconstruction needs while helping the Palestinian Electricity sector institutions maintain progress towards their long-term vision and development outcomes,” said Monali Ranade, World Bank Senior Energy Specialist.

The reconstruction activities in Gaza are based on principles of building back better. The project will proactively incorporate technical solutions such as the replacement of overhead lines with underground cables and the re-design of a low-voltage network to reduce outages. This will help increase the resilience of the electricity network in the face of potential future conflicts and climate risks.

* PID MDTF Donors: Denmark, Netherlands, Norway, France, Finland, Sweden, Croatia, Portugal, United Kingdom and Australia